As professionals with entrepreneurial leanings explore the possibility of starting a small business, they devour business books and consult with friends and family for advice and insights. But no matter how much research and planning they do during the ramp-up phase, there’s no way any entrepreneur can be 100% prepared for small business ownership – there will be plenty of knowledge to pick up during the journey.
That’s why we’ve put together the following collection of small business tips that have surprised many an entrepreneur. Of course, they’ll be most useful to you if you’re in the early phases of small business ownership, but even experienced business owners will take away some actionable ideas that can prevent a near-catastrophe.
Top 6 Small Business Tips
1. Running your business is job one.
You went into business to practice your art, whether that’s fitness training, marketing planning, IT consulting or something else. But practicing your passion only makes up about a third of your time – meaning the other two-thirds are spent on selling, marketing, taxes, payroll, follow-up and dozens of other not-so-passionate tasks. If you don’t place running your business above everything else, your success will have a definite shelf life. If you need to place greater emphasis on business management, start by creating a schedule with blocks of time for producing, administering and marketing. In your first administering block, make a list of all the little tasks that must happen to keep your business operating smoothly and without interruption. Then divide that list among staff, or your own hours, and make sure each happens on a regular basis.
2. Anticipate running out of money.
Sure, you’ve planned and prepped and have a year of expenses saved and can survive on black coffee and peanut brittle for months. But you will still run out of money. It will be terrifying and humbling, but it will also be the catalyst that launches you into a mindset of determination and focus that will make you unstoppable. If you run out of money, make a quick list of projects you could wrap up quickly and focus on getting those done. Review your client roster and reach out to a few you haven’t spoken with in a while with an offer for a tune-up consultation session or updated workout plan to generate some quick cash. Get back on stable ground, then review what happened to cause your money to disappear so you can prevent it from happening again.
3. It’s okay to fire clients.
And not only is it okay, but it’s often the best thing to happen to you. Much of small business ownership falls into the Pareto principle, also known as the 80/20 rule: 80% of your time goes to 20% of activities, 80% of your revenue comes from 20% of your clients, etc. The principle works in reverse too, with 20% of your clients demanding 80% of your time. If you stop working for one or two of that 20% you’ll free up significant time to pursue less demanding clients willing to pay a higher rate. If you have to fire a client, let them know weeks in advance that you won’t be able to meet their needs after a target date and suggest other providers or partners they may want to call. Then make sure all projects are complete by the target date so you can cleanly end the working relationship on your terms.
4. It’s okay to raise your prices.
Not only is it okay; you can probably raise your small business rates by more than you think. Don’t just guess what you should charge though. Clients who value your work will gladly pay a reasonable price increase and new clients won’t know anything else. Any clients who voice considerable complaint are likely in the 20% mentioned above and you can increase your productivity without them on the roster. If you need to raise your prices, start with a pricing strategy so you’ll know with certainty what you need to charge and why. Let clients know via e-mail, letter or face-to-face, with the type of communication vehicle you choose depending on how much work you do for them, the length of the relationship, their volume contribution to your sales or a similar metric of influence.
5. You can never stop networking.
The best time to market your small business is when you don’t need new customers. If you wait until all projects are wrapped to look for new ones you’ll lose momentum and suffer an income interruption, both of which cause stress. If you make networking a part of your schedule with a standing event or two each week it will become a habit, one with positive effects on your business. If you need to do more networking, check MeetUp.com and LinkedIn.com for local business organizations; it doesn’t have to be fancy or even uber-organized as long as those involved are serious about their career and enthusiastic about helping others succeed.
6. You must be able to articulate your value proposition in five seconds.
The old standard for elevator pitches was 30 seconds, but in a world where even babies seem to move at the speed of light a shorter pitch is much more powerful. Create one sentence that tells what you do, for whom, and how it helps them. By limiting yourself to one sentence you’ll have to focus on your core value proposition, which will make easy for people to understand your business and make targeted marketing easier. If you don’t yet have a value proposition or need to revisit yours, start by asking clients, friends and others how they’d describe what you offer and how it benefits them. Polish these sentiments into one concise statement that’s easy for you to remember and practice delivering it until it’s second nature.
Share Your Own Small Business Tips
While this list is by no means comprehensive of all issues small business owners run into, we hope these tips will save you some time, money and heartache. If you’re finding success with our small business tips, please write and let us know – your story may be featured on the Hiscox Small Business Blog!
Be sure to check out more small business tips for start-ups!